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Westamerica Bancorporation Reports Third Quarter 2014 Financial Results

SAN RAFAEL, Calif., Oct. 15, 2014 (GLOBE NEWSWIRE) -- Westamerica Bancorporation (Nasdaq:WABC), parent company of Westamerica Bank, generated net income for the third quarter 2014 of $15.2 million and diluted earnings per common share ("EPS") of $0.58, virtually unchanged from the prior quarter.

"Westamerica's credit quality improved with nonperforming assets totaling $26 million at September 30, 2014, down from $30 million at June 30, 2014 and $52 million at September 30, 2013. With this improvement in credit quality, we reduced our loan loss provision to $600 thousand for the third quarter 2014. Our net interest margin was 3.66 percent in the third quarter, down from 3.76 percent in the prior quarter. Low market interest rates continue to pressure our net interest margin, particularly the securities portfolio yield as we purchase shorter-duration, lower-yielding securities to prepare for rising interest rates. We continue to focus on controlling operating costs while providing superior customer service; our third quarter 2014 expenses were down $341 thousand from the prior quarter and down $1.1 million from the third quarter 2013," said Chairman, President and CEO David Payne. "Our third quarter 2014 earnings delivered a relatively high annualized return on common equity of 11.5 percent for our shareholders, and we paid a $0.38 per share dividend during the quarter," concluded Payne.

Net interest income on a fully taxable equivalent ("FTE") basis was $37.9 million for the third quarter 2014, compared to $38.6 million for the prior quarter and $41.2 million for the third quarter 2013. Net interest income declined as market interest rates on many loan products remain below the yields earned on older-dated loans and on the overall loan portfolio. The Company is reducing its exposure to rising interest rates by purchasing shorter-duration investment securities which carry lower yields than longer-duration securities. The annualized interest cost of funding the Company's loans and investment securities was 0.08 percent for the third quarter 2014, down from 0.09 percent from the prior quarter, and down from 0.11 percent for the third quarter 2013. The annualized net interest margin on a fully taxable equivalent basis was 3.66 percent for the third quarter 2014, compared to 3.76 percent for the prior quarter and 4.01 percent for the third quarter 2013.

The provision for loan losses was $600 thousand for the third quarter 2014, down from $1.0 million for the prior quarter, and down from $1.8 million for the third quarter 2013. Net loan losses charged against the allowance for loan losses totaled $1.2 million for the third quarter 2014, compared to $711 thousand for the prior quarter and $810 thousand for the third quarter 2013. The increase in net loan losses in the third quarter 2014 is due to the charge-off of one nonaccrual loan. At September 30, 2014, the allowance for loan losses totaled $31.8 million; nonperforming originated loans totaled $5.1 million; and nonperforming purchased loans totaled $13.7 million, net of purchase discounts of $298 thousand.

Noninterest income for the third quarter 2014 totaled $13.1 million, compared to $13.2 million for the prior quarter and $14.4 million for the third quarter 2013. Noninterest income was higher in the third quarter 2013 due to higher merchant processing service fees, higher service charges on deposit accounts, and higher loan principal recoveries exceeding purchase date fair values (included in "other noninterest income").

Noninterest expense for the third quarter 2014 totaled $26.6 million, compared to $27.0 million in the prior quarter and $27.8 million for the third quarter 2013. Noninterest expense has declined due to lower OREO costs (net of gains on sale of repossessed loan collateral) and lower personnel costs.

At September 30, 2014, Westamerica Bancorporation's tangible common equity-to-asset ratio was 8.2 percent, assets totaled $5.0 billion and loans outstanding totaled $1.7 billion. Westamerica Bancorporation, through its wholly owned subsidiary Westamerica Bank, operates commercial banking and trust offices throughout Northern and Central California.

Westamerica Bancorporation Web Address: www.westamerica.com

FORWARD-LOOKING INFORMATION:

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company's control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2013 filed on Form 10-K and quarterly report for the quarter ended June 30, 2014 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company's business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.

WESTAMERICA BANCORPORATION
FINANCIAL HIGHLIGHTS
September 30, 2014
1. Net Income Summary.
(in thousands except per-share amounts)
%
Q3'14 Q3'13 Change Q2'14
Net Interest and Fee Income (FTE) $37,905 $41,224 -8.1% $38,582
Provision for Loan Losses 600 1,800 -66.7% 1,000
Noninterest Income 13,054 14,419 -9.5% 13,198
Noninterest Expense 26,616 27,758 -4.1% 26,957
Income Before Taxes (FTE) 23,743 26,085 -9.0% 23,823
Income Tax Provision (FTE) 8,589 9,347 -8.1% 8,666
Net Income $15,154 $16,738 -9.5% $15,157
Average Common Shares Outstanding 25,973 26,670 -2.6% 26,175
Diluted Average Common Shares 26,016 26,705 -2.6% 26,238
Operating Ratios:
Basic Earnings Per Common Share $0.58 $0.63 -7.9% $0.58
Diluted Earnings Per Common Share 0.58 0.63 -7.9% 0.58
Return On Assets (a) 1.21% 1.37% 1.24%
Return On Common Equity (a) 11.5% 12.4% 11.6%
Net Interest Margin (FTE) (a) 3.66% 4.01% 3.76%
Efficiency Ratio (FTE) 52.2% 49.9% 52.1%
Dividends Paid Per Common Share $0.38 $0.37 2.7% $0.38
Common Dividend Payout Ratio 66% 59% 66%
%
9/30'14YTD 9/30'13YTD Change
Net Interest and Fee Income (FTE) $115,351 $127,687 -9.7%
Provision for Loan Losses 2,600 6,400 -59.4%
Noninterest Income 39,242 42,981 -8.7%
Noninterest Expense 80,446 84,627 -4.9%
Income Before Taxes (FTE) 71,547 79,641 -10.2%
Income Tax Provision (FTE) 25,929 28,520 -9.1%
Net Income $45,618 $51,121 -10.8%
Average Common Shares Outstanding 26,192 26,900 -2.6%
Diluted Average Common Shares 26,262 26,919 -2.4%
Operating Ratios:
Basic Earnings Per Common Share $1.74 $1.90 -8.4%
Diluted Earnings Per Common Share 1.74 1.90 -8.4%
Return On Assets (a) 1.24% 1.41%
Return On Common Equity (a) 11.6% 12.7%
Net Interest Margin (FTE) (a) 3.75% 4.13%
Efficiency Ratio (FTE) 52.0% 49.6%
Dividends Paid Per Common Share $1.14 $1.11 2.7%
Common Dividend Payout Ratio 66% 58%
2. Net Interest Income.
(dollars in thousands)
%
Q3'14 Q3'13 Change Q2'14
Interest and Fee Income (FTE) $38,751 $42,400 -8.6% $39,482
Interest Expense 846 1,176 -28.0% 900
Net Interest and Fee Income (FTE) $37,905 $41,224 -8.1% $38,582
Average Earning Assets $4,125,835 $4,093,727 0.8% $4,114,811
Average Interest--
Bearing Liabilities 2,529,300 2,539,219 -0.4% 2,530,030
Yield on Earning Assets (FTE) (a) 3.74% 4.12% 3.85%
Cost of Funds (a) 0.08% 0.11% 0.09%
Net Interest Margin (FTE) (a) 3.66% 4.01% 3.76%
Interest Expense/
Interest-Bearing Liabilities (a) 0.13% 0.18% 0.14%
Net Interest Spread (FTE) (a) 3.61% 3.94% 3.71%
%
9/30'14YTD 9/30'13YTD Change
Interest and Fee Income (FTE) $117,995 $131,334 -10.2%
Interest Expense 2,644 3,647 -27.5%
Net Interest and Fee Income (FTE) $115,351 $127,687 -9.7%
Average Earning Assets $4,111,364 $4,125,407 -0.3%
Average Interest--
Bearing Liabilities 2,531,175 2,605,404 -2.8%
Yield on Earning Assets (FTE) (a) 3.84% 4.25%
Cost of Funds (a) 0.09% 0.12%
Net Interest Margin (FTE) (a) 3.75% 4.13%
Interest Expense/
Interest-Bearing Liabilities (a) 0.14% 0.19%
Net Interest Spread (FTE) (a) 3.70% 4.06%
3. Loans & Other Earning Assets.
(average volume, dollars in thousands)
%
Q3'14 Q3'13 Change Q2'14
Total Assets $4,971,808 $4,830,475 2.9% $4,908,467
Total Earning Assets 4,125,835 4,093,727 0.8% 4,114,811
Total Loans 1,760,115 1,902,389 -7.5% 1,802,041
Commercial Loans 405,066 364,638 11.1% 397,549
Commercial RE Loans 741,962 847,154 -12.4% 775,687
Consumer Loans 613,087 690,597 -11.2% 628,805
Total Investment Securities 2,365,720 2,191,338 8.0% 2,312,770
Available For Sale (Market) 1,317,195 1,049,962 25.5% 1,222,987
Held To Maturity 1,048,525 1,141,376 -8.1% 1,089,783
Unrealized Gain (Loss) 6,344 (11,107) n/m 4,658
Loans/Deposits 40.9% 46.1% 42.5%
%
9/30'14YTD 9/30'13YTD Change
Total Assets $4,923,705 $4,859,473 1.3%
Total Earning Assets 4,111,364 4,125,407 -0.3%
Total Loans 1,794,513 1,990,937 -9.9%
Commercial Loans 397,263 383,907 3.5%
Commercial RE Loans 768,470 877,490 -12.4%
Consumer Loans 628,780 729,540 -13.8%
Total Investment Securities 2,316,851 2,134,470 8.5%
Available For Sale (Market) 1,230,002 985,121 24.9%
Held To Maturity 1,086,849 1,149,349 -5.4%
Unrealized Gain (Loss) 6,344 (11,107) n/m
Loans/Deposits 42.2% 47.9%
4. Deposits, Other Interest-Bearing Liabilities & Equity.
(average volume, dollars in thousands)
%
Q3'14 Q3'13 Change Q2'14
Total Deposits $4,303,389 $4,130,881 4.2% $4,238,769
Noninterest Demand 1,869,853 1,699,169 10.0% 1,799,994
Interest Bearing Transaction 790,040 751,317 5.2% 783,737
Savings 1,215,647 1,138,491 6.8% 1,202,519
Time greater than $100K 233,511 317,630 -26.5% 251,013
Time less than $100K 194,338 224,274 -13.3% 201,506
Total Short-Term Borrowings 71,067 56,844 25.0% 60,876
Federal Home Loan Bank Advances 20,240 25,663 -21.1% 20,379
Term Repurchase Agreement 4,457 10,000 -55.4% 10,000
Debt Financing -- 15,000 n/m --
Shareholders' Equity 520,702 534,634 -2.6% 525,288
Demand Deposits/
Total Deposits 43.5% 41.1% 42.5%
Transaction & Savings
Deposits / Total Deposits 90.1% 86.9% 89.3%
%
9/30'14YTD 9/30'13YTD Change
Total Deposits $4,250,969 $4,153,956 2.3%
Noninterest Demand 1,813,141 1,657,819 9.4%
Interest Bearing Transaction 785,215 757,035 3.7%
Savings 1,203,690 1,148,306 4.8%
Time greater than $100K 247,485 358,874 -31.0%
Time less than $100K 201,438 231,922 -13.1%
Total Short-Term Borrowings 64,836 58,548 10.7%
Federal Home Loan Bank Advances 20,379 25,719 -20.8%
Term Repurchase Agreement 8,132 10,000 -18.7%
Debt Financing -- 15,000 n/m
Shareholders' Equity 526,337 538,319 -2.2%
Demand Deposits/
Total Deposits 42.7% 39.9%
Transaction & Savings
Deposits / Total Deposits 89.4% 85.8%
5. Interest Yields Earned & Rates Paid.
(dollars in thousands)
Q3'14
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,125,835 $38,751 3.74%
Total Loans (FTE) 1,760,115 22,538 5.08%
Commercial Loans (FTE) 405,066 5,478 5.37%
Commercial RE Loans 741,962 11,465 6.13%
Consumer Loans 613,087 5,595 3.63%
Total Investments (FTE) 2,365,720 16,213 2.74%
Interest Expense Paid
Total Earning Assets 4,125,835 846 0.08%
Total Interest-Bearing Liabilities 2,529,300 846 0.13%
Total Interest-Bearing Deposits 2,433,536 709 0.12%
Interest-Bearing Transaction 790,040 69 0.03%
Savings 1,215,647 221 0.07%
Time less than $100K 194,338 200 0.41%
Time greater than $100K 233,511 219 0.37%
Total Short-Term Borrowings 71,067 23 0.13%
Federal Home Loan Bank Advances 20,240 103 2.02%
Term Repurchase Agreement 4,457 11 1.00%
Net Interest Income and
Margin (FTE) $37,905 3.66%
Q3'13
Average Income/ Yield (a) /
Volume Expense Rate
Interest & Fee Income Earned
Total Earning Assets (FTE) $4,093,727 $42,400 4.12%
Total Loans (FTE) 1,902,389 25,633 5.35%
Commercial Loans (FTE) 364,638 5,761 6.27%
Commercial RE Loans 847,154 13,276 6.22%
Consumer Loans 690,597 6,596 3.80%
Total Investments (FTE) 2,191,338 16,767 3.06%
Interest Expense Paid
Total Earning Assets 4,093,727 1,176 0.11%
Total Interest-Bearing Liabilities 2,539,219 1,176 0.18%
Total Interest-Bearing Deposits 2,431,712 809 0.13%
Interest-Bearing Transaction 751,317 66 0.04%
Savings 1,138,491 228 0.08%
Time less than $100K 224,274 258 0.46%
Time greater than $100K 317,630 257 0.32%
Total Short-Term Borrowings 56,844 20 0.14%
Federal Home Loan Bank Advances 25,663 122 1.89%
Term Repurchase Agreement 10,000 25 0.98%
Debt Financing 15,000 200 5.35%
Net Interest Income and
Margin (FTE) $41,224 4.01%
6. Noninterest Income.
(dollars in thousands except per-share amounts)
%
Q3'14 Q3'13 Change Q2'14
Service Charges on Deposits $6,207 $6,433 -3.5% $6,105
Merchant Processing Services 1,742 2,151 -19.0% 1,820
Debit Card Fees 1,543 1,467 5.2% 1,534
Other Service Fees 695 716 -2.9% 688
ATM Processing Fees 637 701 -9.2% 634
Trust Fees 629 567 10.9% 615
Financial Services Commissions 194 150 29.1% 221
Other Income 1,407 2,234 -37.0% 1,581
Total Noninterest Income $13,054 $14,419 -9.5% $13,198
Total Revenue (FTE) $50,959 $55,643 -8.4% $51,780
Noninterest Income/Revenue (FTE) 25.6% 25.9% 25.5%
Service Charges/Avg. Deposits (a) 0.57% 0.62% 0.58%
Total Revenues (FTE) Per Avg.
Common Share (a) $7.78 $8.28 -6.0% $7.93
%
9/30'14YTD 9/30'13YTD Change
Service Charges on Deposits $18,322 $19,427 -5.7%
Merchant Processing Services 5,485 6,973 -21.3%
Debit Card Fees 4,482 4,302 4.2%
Other Service Fees 2,044 2,174 -6.0%
ATM Processing Fees 1,891 2,128 -11.1%
Trust Fees 1,899 1,720 10.4%
Financial Services Commissions 585 614 -4.6%
Other Income 4,534 5,643 -19.7%
Total Noninterest Income $39,242 $42,981 -8.7%
Total Revenue (FTE) $154,593 $170,668 -9.4%
Noninterest Income/Revenue (FTE) 25.4% 25.2%
Service Charges/Avg. Deposits (a) 0.58% 0.63%
Total Revenues (FTE) Per Avg.
Common Share (a) $7.89 $8.48 -7.0%
7. Noninterest Expense.
(dollars in thousands)
%
Q3'14 Q3'13 Change Q2'14
Salaries & Benefits $13,639 $13,826 -1.4% $13,926
Occupancy 3,811 3,829 -0.5% 3,746
Outsourced Data Processing 2,093 2,139 -2.1% 2,115
Amortization of
Identifiable Intangibles 1,056 1,163 -9.2% 1,058
Professional Fees 700 730 -4.0% 577
Furniture & Equipment 1,059 974 8.7% 1,005
Other Real Estate Owned (287) 179 n/m (270)
Courier Service 663 725 -8.6% 665
Other Operating 3,882 4,193 -7.4% 4,135
Total Noninterest Expense $26,616 $27,758 -4.1% $26,957
Noninterest Expense/
Avg. Earning Assets (a) 2.56% 2.69% 2.63%
Noninterest Expense/Revenues (FTE) 52.2% 49.9% 52.1%
%
9/30'14YTD 9/30'13YTD Change
Salaries & Benefits $41,691 $42,293 -1.4%
Occupancy 11,284 11,353 -0.6%
Outsourced Data Processing 6,314 6,436 -1.9%
Amortization of
Identifiable Intangibles 3,219 3,547 -9.2%
Professional Fees 1,707 2,109 -19.1%
Furniture & Equipment 3,070 2,875 6.8%
Other Real Estate Owned (908) 791 n/m
Courier Service 1,938 2,204 -12.1%
Other Operating 12,131 13,019 -6.8%
Total Noninterest Expense $80,446 $84,627 -4.9%
Noninterest Expense/
Avg. Earning Assets (a) 2.62% 2.74%
Noninterest Expense/Revenues (FTE) 52.0% 49.6%
8. Provision for Loan Losses.
(dollars in thousands)
%
Q3'14 Q3'13 Change Q2'14
Average Total Loans $1,760,115 $1,902,389 -7.5% $1,802,041
Allowance for Loan Loss (ALL)
Beginning of Period $32,398 $30,926 4.8% $32,109
Provision for Loan Losses 600 1,800 -66.7% 1,000
Net ALL Losses (1,229) (810) 51.6% (711)
ALL End of Period $31,769 $31,916 -0.5% $32,398
ALL Recoveries/Gross ALL Losses 33% 53% 52%
Net ALL Losses/Avg. Total Loans (a) 0.28% 0.17% 0.16%
%
9/30'14YTD 9/30'13YTD Change
Average Total Loans $1,794,513 $1,990,937 -9.9%
Allowance for Loan Loss (ALL)
Beginning of Period $31,693 $30,234 4.8%
Provision for Loan Losses 2,600 6,400 -59.4%
Net ALL Losses (2,524) (4,718) -46.5%
ALL End of Period $31,769 $31,916 -0.5%
ALL Recoveries/Gross ALL Losses 45% 38%
Net ALL Losses/Avg. Total Loans (a) 0.19% 0.32%
9. Credit Quality.
(dollars in thousands)
%
9/30/14 9/30/13 Change 6/30/14
Nonperforming Originated Loans:
Nonperforming Nonaccrual $4,696 $5,786 -18.8% $6,757
Performing Nonaccrual 13 1,093 -98.8% 203
Total Nonaccrual Loans 4,709 6,879 -31.5% 6,960
90+ Days Past Due Accruing Loans 342 392 -12.8% 183
Total 5,051 7,271 -30.5% 7,143
Repossessed Originated Loan Collateral 5,123 3,162 62.0% 5,308
Total Nonperforming
Originated Assets 10,174 10,433 -2.5% 12,451
Nonperforming Purchased Covered Loans (1,3):
Nonperforming Nonaccrual 295 24,348 n/m --
Performing Nonaccrual -- 1,937 n/m --
Total Nonaccrual Loans 295 26,285 n/m --
90+ Days Past Due Accruing Loans -- 23 n/m --
Total 295 26,308 n/m --
Repossessed Purchased Covered
Loan Collateral (1,3) 585 9,273 n/m 585
Total Nonperforming Purchased
Covered Assets (1,3) 880 35,581 n/m 585
Nonperforming Purchased Non-Covered Loans (2,3):
Nonperforming Nonaccrual 12,745 2,664 n/m 12,707
Performing Nonaccrual 552 701 n/m 895
Total Nonaccrual Loans 13,297 3,365 n/m 13,602
90+ Days Past Due Accruing Loans 76 -- n/m 351
Total 13,373 3,365 n/m 13,953
Repossessed Purchased Non-Covered
Loan Collateral (2,3) 1,565 2,535 n/m 2,650
Total Nonperforming Purchased
Non-Covered Assets (2,3) 14,938 5,900 n/m 16,603
Total Nonperforming Assets $25,992 $51,914 -49.9% $29,639
Total Originated Loans Outstanding $1,489,565 $1,523,090 -2.2% $1,517,278
Total Purchased Covered
Loans Outstanding (1,3) 17,523 296,380 n/m 18,169
Total Purchased Non-Covered
Loans Outstanding (2,3) 225,294 57,838 n/m 249,161
Total Loans Outstanding $1,732,382 $1,877,308 -7.7% $1,784,608
Total Assets $4,993,725 $4,806,487 3.9% $4,931,095
Loans:
Allowance for Loan Losses $31,769 $31,916 -0.5% $32,398
Allowance/Loans 1.83% 1.70% 1.82%
Nonperforming Loans/Total Loans 1.08% 1.97% 1.18%
Purchased Covered Loans (1,3):
Fair Value Discount on Purchased
Covered Loans $501 $14,489 $529
Discount/Purchased Covered
Loans, gross 2.78% 4.66% 2.83%
Nonperforming Purchased Covered Loans/
Total Purchased Covered Loans 1.68% 8.88% 0.00%
Purchased Non-Covered Loans (2,3):
Fair Value Discount on Purchased
Non-Covered Loans $10,233 $2,989 $11,193
Discount/Purchased Non-Covered 4.34% 4.91% 4.30%
Loans, gross
Nonperforming Purchased Non-Covered Loans/
Total Purchased Non-Covered Loans 5.94% 5.82% 5.60%
10. Capital.
(in thousands, except per-share amounts)
%
9/30/14 9/30/13 Change 6/30/14
Shareholders' Equity $533,395 $541,840 -1.6% $538,803
Tier I Regulatory Capital 392,992 404,189 -2.8% 394,760
Total Regulatory Capital 433,942 442,920 -2.0% 437,514
Total Assets 4,993,725 4,806,487 3.9% 4,931,095
Risk-Adjusted Assets 2,886,487 2,769,664 4.2% 2,909,838
Shareholders' Equity/
Total Assets 10.68% 11.27% 10.93%
Shareholders' Equity/
Total Loans 30.79% 28.86% 30.19%
Tier I Capital/Total Assets 7.87% 8.41% 8.01%
Tier I Capital/
Risk-Adjusted Assets 13.61% 14.59% 13.57%
Total Regulatory Capital/
Risk-Adjusted Assets 15.03% 15.99% 15.04%
Tangible Common Equity Ratio 8.16% 8.58% 8.36%
Common Shares Outstanding 25,906 26,578 -2.5% 26,074
Common Equity Per Share $20.59 $20.39 1.0% $20.66
Market Value Per Common Share $46.52 $49.74 -6.5% $52.28
Share Repurchase Programs
(shares in thousands)
%
Q3'14 Q3'13 Change Q2'14
Total Shares Repurchased 175 256 -31.7% 271
Average Repurchase Price $48.62 $48.48 0.3% $50.33
Net Shares Repurchased 168 191 -12.4% 225
%
9/30'14YTD 9/30'13YTD Change
Total Shares Repurchased 883 873 1.1%
Average Repurchase Price $50.78 $45.59 11.4%
Net Shares Repurchased 604 635 -4.9%
11. Period-End Balance Sheets.
(unaudited, dollars in thousands)
%
9/30/14 9/30/13 Change 6/30/14
Assets:
Cash and Due from Banks $524,338 $388,579 34.9% $484,904
Investment Securities:
Available For Sale 1,391,362 1,060,428 31.2% 1,278,242
Held to Maturity 1,035,041 1,141,083 -9.3% 1,069,135
Loans 1,732,382 1,877,308 -7.7% 1,784,608
Allowance For Loan Losses (31,769) (31,916) -0.5% (32,398)
Total Loans, net 1,700,613 1,845,392 -7.8% 1,752,210
Other Real Estate Owned 7,273 14,970 -51.4% 8,543
Premises and Equipment, net 37,335 37,972 -1.7% 37,424
Identifiable Intangibles, net 15,338 19,714 -22.2% 16,394
Goodwill 121,673 121,673 0.0% 121,673
Other Assets 160,752 176,676 -9.0% 162,570
Total Assets $4,993,725 $4,806,487 3.9% $4,931,095
Liabilities and Shareholders' Equity:
Deposits:
Noninterest Bearing $1,893,480 $1,689,986 12.0% $1,814,023
Interest-Bearing Transaction 775,377 737,029 5.2% 756,596
Savings 1,231,640 1,150,219 7.1% 1,198,353
Time 421,141 531,073 -20.7% 444,417
Total Deposits 4,321,638 4,108,307 5.2% 4,213,389
Short-Term Borrowed Funds 76,943 47,821 60.9% 68,962
Federal Home Loan Bank Advances 20,156 25,631 -21.4% 20,296
Term Repurchase Agreement -- 10,000 n/m 10,000
Debt Financing -- 15,000 n/m --
Other Liabilities 41,593 57,888 -28.1% 79,645
Total Liabilities 4,460,330 4,264,647 4.6% 4,392,292
Shareholders' Equity:
Common Equity:
Paid-In Capital 382,906 373,799 2.4% 384,893
Accumulated Other
Comprehensive Income 9,733 4,120 n/m 12,554
Retained Earnings 140,756 163,921 -14.1% 141,356
Total Shareholders' Equity 533,395 541,840 -1.6% 538,803
Total Liabilities and
Shareholders' Equity $4,993,725 $4,806,487 3.9% $4,931,095
12. Income Statements.
(unaudited, in thousands except per-share amounts)
%
Q3'14 Q3'13 Change Q2'14
Interest & Fee Income:
Loans $22,129 $25,116 -11.9% $22,787
Investment Securities:
Available for Sale 6,350 5,426 17.0% 5,875
Held to Maturity 6,421 7,414 -13.4% 6,741
Total Interest & Fee Income 34,900 37,956 -8.1% 35,403
Interest Expense:
Transaction Deposits 69 66 4.8% 67
Savings Deposits 221 228 -3.0% 238
Time Deposits 419 515 -18.6% 449
Short-Term Borrowed Funds 23 20 13.8% 21
Federal Home Loan Bank Advances 103 122 -15.8% 101
Term Repurchase Agreement 11 25 -54.6% 24
Debt Financing -- 200 n/m --
Total Interest Expense 846 1,176 -28.0% 900
Net Interest Income 34,054 36,780 -7.4% 34,503
Provision for Loan Losses 600 1,800 -66.7% 1,000
Noninterest Income:
Service Charges 6,207 6,433 -3.5% 6,105
Merchant Processing Services 1,742 2,151 -19.0% 1,820
Debit Card Fees 1,543 1,467 5.2% 1,534
Other Service Fees 695 716 -2.9% 688
ATM Processing Fees 637 701 -9.2% 634
Trust Fees 629 567 10.9% 615
Financial Services Commissions 194 150 29.1% 221
Other 1,407 2,234 -37.0% 1,581
Total Noninterest Income 13,054 14,419 -9.5% 13,198
Noninterest Expense:
Salaries and Benefits 13,639 13,826 -1.4% 13,926
Occupancy 3,811 3,829 -0.5% 3,746
Outsourced Data Processing 2,093 2,139 -2.1% 2,115
Amortization of Identifiable Intangibles 1,056 1,163 -9.2% 1,058
Professional Fees 700 730 -4.0% 577
Furniture & Equipment 1,059 974 8.7% 1,005
Other Real Estate Owned (287) 179 n/m (270)
Courier Service 663 725 -8.6% 665
Other 3,882 4,193 -7.4% 4,135
Total Noninterest Expense 26,616 27,758 -4.1% 26,957
Income Before Income Taxes 19,892 21,641 -8.1% 19,744
Income Tax Provision 4,738 4,903 -3.4% 4,587
Net Income $15,154 $16,738 -9.5% $15,157
Average Common Shares Outstanding 25,973 26,670 -2.6% 26,175
Diluted Common Shares Outstanding 26,016 26,705 -2.6% 26,238
Per Common Share Data:
Basic Earnings $0.58 $0.63 -7.9% $0.58
Diluted Earnings 0.58 0.63 -7.9% 0.58
Dividends Paid 0.38 0.37 2.7% 0.38
%
9/30'14YTD 9/30'13YTD Change
Interest & Fee Income:
Loans $67,817 $78,696 -13.8%
Investment Securities:
Available for Sale 17,855 16,293 9.6%
Held to Maturity 20,195 22,701 -11.0%
Total Interest & Fee Income 105,867 117,690 -10.0%
Interest Expense:
Transaction Deposits 203 196 3.5%
Savings Deposits 693 686 1.0%
Time Deposits 1,320 1,673 -21.1%
Short-Term Borrowed Funds 64 58 11.9%
Federal Home Loan Bank Advances 304 360 -15.8%
Term Repurchase Agreement 60 73 -17.8%
Debt Financing -- 601 n/m
Total Interest Expense 2,644 3,647 -27.5%
Net Interest Income 103,223 114,043 -9.5%
Provision for Loan Losses 2,600 6,400 -59.4%
Noninterest Income:
Service Charges 18,322 19,427 -5.7%
Merchant Processing Services 5,485 6,973 -21.3%
Debit Card Fees 4,482 4,302 4.2%
Other Service Fees 2,044 2,174 -6.0%
ATM Processing Fees 1,891 2,128 -11.1%
Trust Fees 1,899 1,720 10.4%
Financial Services Commissions 585 614 -4.6%
Other 4,534 5,643 -19.7%
Total Noninterest Income 39,242 42,981 -8.7%
Noninterest Expense:
Salaries and Benefits 41,691 42,293 -1.4%
Occupancy 11,284 11,353 -0.6%
Outsourced Data Processing 6,314 6,436 -1.9%
Amortization of Identifiable Intangibles 3,219 3,547 -9.2%
Professional Fees 1,707 2,109 -19.1%
Furniture & Equipment 3,070 2,875 6.8%
Other Real Estate Owned (908) 791 n/m
Courier Service 1,938 2,204 -12.1%
Other 12,131 13,019 -6.8%
Total Noninterest Expense 80,446 84,627 -4.9%
Income Before Income Taxes 59,419 65,997 -10.0%
Income Tax Provision 13,801 14,876 -7.2%
Net Income $45,618 $51,121 -10.8%
Average Common Shares Outstanding 26,192 26,900 -2.6%
Diluted Common Shares Outstanding 26,262 26,919 -2.4%
Per Common Share Data:
Basic Earnings $1.74 $1.90 -8.4%
Diluted Earnings 1.74 1.90 -8.4%
Dividends Paid 1.14 1.11 2.7%
Footnotes and Abbreviations:
(FTE) Fully Taxable Equivalent
(a) Annualized
(1) Purchased covered loans and repossessed loan collateral represent assets purchased in a business combination on which losses are shared with the FDIC per a Loss-Sharing Agreement.
(2) Purchased non-covered loans and repossessed loan collateral represent assets purchased in a business combination.
(3) The FDIC indemnification of non-single family assets acquired from the former County Bank expired 2/6/14 and were reclassified into purchased non-covered loans and repossessed loan collateral.

CONTACT: Westamerica Bancorporation 1108 Fifth Avenue, San Rafael, CA 94901 Robert A. Thorson - SVP & Chief Financial Officer 707-863-6840 investments@westamerica.com

Source:Westamerica Bancorporation